City withholding $59M from final LRT payment

The City of Ottawa is holding back $59 million from its final payment to Confederation Line builder Rideau Transit Group (RTG) to cover costs related to the LRT's 456-day delay.

RTG was owed $202 million after it handed over the $2.1-billion light rail system on Aug. 30, but a cheque from the city Tuesday has only been made out for $143 million.

In June, the city estimated the delays were costing it about $35 million for things like keeping buses on the road longer than expected, extending bus detours and paying drivers overtime and incentives.

However, that estimate was based on the LRT being finished by Canada Day. Instead, it's opening Saturday, hence the extra $24 million.

Missed deadlines

The city had always planned to withhold the money in compensation for the delays. That includes separate $1-million penalties for missing four official deadlines. Three of those payments were subtracted from an earlier payment in July, while the fourth penalty, for missing the Aug. 16 deadline, was subtracted from the final payment.

I don't care what RTG thinks about that. - John Manconi, general manager, transportation services

"Fifty-nine million dollars is what we're deducting off their payment," John Manconi, the city's general manager of transportation, told reporters Tuesday. "We've tracked all our costs to date, the overtime, the premiums. Our mandate was very, very clear to stay whole in terms of no increased costs to the city, so that's what's going out today."

It's not at all clear that RTG will agree to pay those costs, however. When asked about the consortium's view on the payment, Manconi said, "I don't care what RTG thinks about that."